Quek Jr. comes into his own

SIX years after emerging as heir apparent to the Hong
Leong empire, Quek Kon Sean has struck a deal to acquire 27.89 million
new shares in TH Heavy Engineering Bhd in a deal valued at RM12.2
million.



TH Heavy will also sell some 64.95 million new shares to Guoline Capital Ltd at 45 sen a piece.

The stock closed seven sen higher yesterday at 53.5 sen each.

Guoline is understood to be a company linked to Tan Sri Quek Leng Chan, who currently runs the Hong Leong empire.

Kon Sean is Quek's youngest son and the only one of Quek's three
children to follow in his father's footsteps into the banking business.

[You must be registered and logged in to see this image.]

The sale of new shares will net TH Heavy some RM41.75 million cash, which the company plans to use as working capital.

The deal will see Tabung Haji diluting its stake in TH Heavy to 29.09
per cent from the current 32 per cent. The number of shares owned by
Tabung Haji in TH Heavy will remain at 296.952 million.

Tabung Haji's role as the driver in TH Heavy will remain as it is still the single largest stakeholder in the company.

The pilgrimage fund will be quietly pleased with the share sale as it
is done at a level that is almost equivalent to the price per share paid
by Tabung Haji to gain control of TH Heavy, formerly known as Ramunia
Holdings Bhd.

Tabung Haji emerged in TH Heavy in 2007 and
reportedly forked out as much as RM235 million to build its stake in
the oil and gas company.

Tabung Haji had reportedly bought TH heavy shares for between 90 sen and RM1.30 each.

However, since Tabung Haji's investment into TH Heavy, the capital spread in the company has also increased.

For example, when TH Heavy outlined its restructuring plan in 2011,
Tabung Haji owned 166.8 million TH Heavy shares, which acounted for
25.17 per cent of the company's capital spread.

Currently, TH
Heavy has a spread of 927.97 million shares issued at 25 sen a share and
the deal with Quek will increase TH Heavy's paid up spread to 1.02
billion shares.

The deal will see Kon Sean and Guoline having a
combined 6.36 per cent stake in TH Heavy, a company which is headed for
big things in the near future.

Hence, the younger Quek lending
his name to the share purchase deal could be a signal to the market that
at age of 33, he is ready to assume a more visible role in the Hong
Leong empire.

Kon Sean was appointed to the board of Hong Leong
Bank Bhd in July 2006 and he soon assumed directorships in other
companies controlled by his father.

His father is the country's
fourth richest man with a fortune valued at US$4.8 billion (RM14.25
billion), with the bulk of the fortune parked at Hong Kong's Guoco group
and Hong Leong group.

The senior Quek took charge of Hong
Leong group's Malaysian operations in 1973 and soon built a reputation
as a businessman, coached in the art of buying low and selling high.

Quek rose to global prominence in 2001 when he received RM11.5 billion
for selling his controlling stake in Dao Heng Bank of Hong Kong to
Singapore's DBS Bank.

At the time, it was the highest price paid for an Asian bank.

Interestingly, Kon Sean's name emerged in the share purchase deal just a
month before TH Heavy shareholders will be asked to vote on a series of
proposals, which could change the future of the company.


Shareholders will be asked to approve proposals that will allow for a 30
per cent share swap deal between Berlian McDermott Sdn Bhd, the local
arm of McDermott International, and TH Fabricators Sdn Bhd in a deal
worth US$25.4 million.

McDermott International, which has a
yearly revenue of about US$4 billion, is a global engineering,
procurement, construction and installation company for the oil and gas
sector. It has a presence in about 20 countries.

The shareholder
approval will help formalise the formation of two local companies
offering engineering, procurement and project management services, in
which McDermott and TH Heavy will have equal ownership.

It will
also help TH Heavy boost chances of taking in jobs offered by national
oil company Petroliam Nasional Bhd, which cannot be undertaken by
Malaysia Marine and Heavy Engineering Holdings Bhd.

It will
brighten TH Heavy's chances of getting a risk service contract to run
and operate marginal oil fields for Petronas, as well as bid for jobs in
the Malaysia-Thailand joint development area, an overlapping
continental shelf measuring 7,250 sq km in size, which has huge oil and
gas reserves.